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BD_DC18 - Solutions to Chapter 18 Data Case All numbers...

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Solutions to Chapter 18 Data Case All numbers except per share data in millions Mar-06 Mar-05 Mar-04 Mar-03 1c St. Price 108.9 74.38 74.5 44.95 2 Growth 10% 5% Year 0 1 2 3 4 5 6 7 8 9 10 FCF's (1,500) 220 242 266 280 293 308 324 340 357 375 3 3aii YTM--Cost of Debt 5.267% 3b 3b 10-year Bond 4.52% 3bii Beta 0.56 3biii Cost of Equity 7.0400% 3c Mar-06 Mar-05 Mar-04 Mar-03 3ci Net Debt 74,994.00 65,907.00 55,177.00 47,123.00 3cii Equity 177,150.90 122,581.96 126,243.23 77,575.16 3ciii Enterprise Value 252,144.90 188,488.96 181,420.23 124,698.16 3civ Debt to Value 0.2974242227 0.34965974 0.30413918 0.37789652 Target Debt 33.23% 3d Tax Rate 36.64% 3e Levered WACC 5.81% 4 NPV-WACC $674.39 5 Unlevered WACC 6.45% Unlevered Value $2,104 Levered Value 2,174 2,081 1,960 1,807 1,633 1,434 1,209 956 672 354 Debt Capacity 723 691 651 601 543 477 402 318 223 118 Interest Pmts 38.05 36.41 34.30 31.63 28.57 25.10 21.16 16.73 11.76 6.20 Interest Tax Shield 13.94 13.34 12.57 11.59 10.47 9.20 7.76 6.13 4.31 2.27 PV Tax Shield $70.69 Levered Value $2,174.39 NPV--APV $674.39 FCF Valuation After-tax Interest Pmts 24.1097658 23.0710632 21.7280792 20.038743 18.103681 15.90124 13.4081383 10.599353 7.44800334 3.925218 Net Borrowing 723 (31) (40) (51) (58) (66) (75) (84) (94) (106) (118) FCF to Equity (777) 165 179 194 201 209 218 226 235 244 253 NPV 674.39
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Income Statements All amounts in millions except per share amounts. Mar-06 Mar-05 Mar-04 Mar-03 (TTM) (TTM) (TTM) (TTM) Operating Revenue 179,083.00 172,749.00 163,637.00 128,965.00 Total Revenue 179,083.00 172,749.00 163,637.00 128,965.00 Adjustment to Revenue 0 0 0 0 Cost of Sales 133,938.00 129,178.00 122,061.00 95,404.00 Cost of Sales with Depreciation 144,249.00 138,469.00 131,238.00 102,647.00 Gross Margin 0 0 0 0 Gross Operating Profit 45,145.00 43,571.00 41,576.00 33,561.00 R&D 0 0 0 0 SG&A 18,844.00 18,709.00 16,627.00 15,739.00 Advertising 0 0 0 0 Operating Profit 15,990.00 15,571.00 15,772.00 10,579.00 Operating Profit before Depreciation (EBITDA) 26,301.00 24,862.00 24,949.00 17,822.00 Depreciation 10,311.00 9,291.00 9,177.00 7,243.00 Depreciation Unreconciled 0 0 0 0 Amortization 0 0 0 0
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